Data released last week show that corporate profits in the fourth quarter of 2005 claimed the largest share of GDP in forty years. Not since the third quarter of 1966 have profits taken a larger chunk of the economy.

More alarming (for labor) is the abrupt acceleration in profit's share during the Bush years:

Since the third quarter of 2001 the share of GDP going to corporate profits has soared from 7.0 percent to 11.6 percent, while the share going to labor compensation declined by 2.4 percentage points.

Optimists insist that, in the long run, profits can only grow as fast as GDP. If this is true, then labor's declining income share is unsustainable, and will eventually "self correct." That's what we've seen historically.

But the foreign-born share of the labor force—15 percent in 2005—is also unprecedented. Since 2001 illegals have accounted for most of immigrant labor force growth.

But that was in 1914. We were a "closed economy" in which production and demand were overwhelmingly domestic. What was good for Ford workers was good for Ford, and vice-versa.

Arguably, the world today is run by a global elite who have more in common with each other than with the middle classes who happen to share their nationality and work in their factories.

For most of the twentieth century the income distribution traced a long U-shape, with inequality declining from 1930 to about 1970 and increasing in subsequent decades. Recently, even liberal economists have discerned the role immigration plays in these trends:

The very mention of immigration is significant. Mainstream economists rarely list it as a likely suspect, focusing instead on the increased demand for skilled workers as explanation for increased income inequality. But are we to believe that such skills were irrelevant during the 1930 to 1970 period? Dew-Becker and Gordon write:

"It is possible that the heyday of unionized, assembly-line manufacturing provided an abundance of repetitive jobs for high-school dropouts, but the fact that these jobs paid relatively well depended perhaps more on the strength of unions and the relative absence of immigration and imports."

For American workers, the signs are not good—until immigration policy changes.